Pro-Gest Group Announces the Issuance of New Private Placement Notes


Pro-Gest Group an Italian leading vertically-integrated producer of recycled paper, containerboard, corrugated cardboard and packaging solutions with over EUR 450m revenues, about 1,200 employees and 29 production sites, has announced it has successfully closed a transaction, whereby the subsidiaries Cartiere Villa Lagarina S.p.A. and Tolentino S.p.A. have issued private placement secured notes in a total amount of EUR 125m, fully subscribed by Carlyle’s Global Credit platform.

In addition, Carlyle’s Global Credit platform has provided for a further commitment to subscribe additional Notes to be issued by Cartitalia S.r.l., a subsidiary of Pro-Gest S.p.A., in an amount up to EUR 75m, which are expected to be issued before the end of 2021.

As explained by Bruno Zago, who founded the group in 1973, «The transaction heralds a new era for the ProGest Group. With a reinforced capital structure, the Group is well-placed to accelerate its growth and benefit from the structural positive trends in the industry, particularly with the restart of the Mantua plant. As part of these developments together with my son and daughters, I am pleased to announce that Francesco will be taking over the role of the Group CEO from 2021. We have also reinforced the Management Team with strategic hires and will be strengthening the Board to support the Group in its next growth phase».

«I am honoured to take over from my father, who has always been an inspiration and role model» commented Francesco Zago. «My ambition is to continue the development of our Group, working together with my three sisters, Benedetta and Valentina heading the important business units of industrial packaging, fruit & vegetables trays, take-away and bags; and Alessandra, who is charge of international procurement for the whole Group. It is my intention to continue supporting the Companies through the strength of the Family, who has always acted based on solid foundations and has also been supported by a qualified Management Team that is continually strengthening. We have invested over EUR 500m in the last five years, including our flagship Mantua plant, and we can now harvest these investments and realize growth, consistent with the targets set in our business plan. This puts us in a good place to continue to grow and compete with international peers, both in terms of financial metrics and organizational set-up. The credibility we have obtained with this successful transaction confirms the potential in our future and is based on the capability of our Family to meet the business plan targets. To achieved our growth ambitions, we will continue to strengthen the Group with additional strategic hires as we did earlier this year with Mr Paolo Fregolent, who has been nominated Group CFO, and Mr Silvano Storer, as Financial Planning and Advisor to the Board».

Silvano Storer, who has recently been appointed as business plan implementation manager, added that «The transaction will simplify the capital structure and create significant financial flexibility for the Group.

The first issuance of EUR 125m with a 5-year maturity has been used to repay most of the existing amortizing facilities, while the second issuance of up to EUR 75m to be issued in 2021, will be used to provide liquidity to support the growth ambitions of the Group as per our business plan, which are expected to lead to a reduction in the financial leverage over time».

The Business Plan Implementation Manager will report to the CEO and to the Board. As part of the transaction, the Group will be broadening the Board of Directors from its current 5 (Bruno Zago, Francesco Zago, Anna Maria Gasparini, Benedetta Zago and Valentina Zago) to nine members. Alessandra Zago, Silvano Storer and two independent Board members will be nominated to join the Board, which will be led by Bruno Zago as Chairman and Anna Maria Gasparini as Deputy Chairman. These positions will be appointed by the end of the first quarter of 2021.

«Notwithstanding 2020 has been a tough year from several viewpoints» concluded Bruno Zago, «we are satisfied with all the good work that has been done during the year, which allowed us to get the planned business goals. This is also due to our positioning and focus on end markets that are more resilient to the pandemic such as food & beverage amongst others. As we enter 2021, we see a continuation of the good momentum we have in our core business, which will be reinforced by contributions from the restart of the Mantua plant».

New corrugator at Grezzago plant

Meanwhile, Italy’s paper and packaging group Pro-Gest has completed the construction of a state-of-the-art corrugated board plant in Grezzago, halfway between Monza and Bergamo in the Italian province of Lombardy. The facility houses a new Fosber corrugator.  It can reportedly reach speeds of up to 450 m/min and has a production capacity of 300m m² per year.  Production is scheduled for start-up in January.